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Estonia Inflation

Estonia: Consumer prices record largest drop in four-and-a-half years

July 7, 2014

Consumer prices were flat over the previous month in June, which was down slightly from the 0.1% increase observed in May. According to Statistics Estonia, much higher prices for hotels and restaurants were offset by lower prices for alcoholic beverages and tobacco, as well as for communication.

Consumer prices swung from a 0.1% annual increase in May to a 0.4% decrease in June, which marked the lowest rate since January 2010. Meanwhile, annual HICP inflation—based on the harmonized index of consumer prices—edged down from 0.8% in April to 0.6% in May (the last month for which data are available). Annual average HICP inflation fell from 2.4% in April to 2.1% in May.

The Central Bank expects HICP inflation of 2.3% in 2014 and of 3.0% in 2015. FocusEconomics Consensus Forecast panelists expect harmonized inflation to average 1.5% in 2014, which is down 0.3 percentage points from last month’s forecast. In 2015, the panel expects average inflation to accelerate to 2.3%.

Author:Carl Kelly, Economist

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According to Statistics Estonia, growth in industrial production accelerated from a revised working-day adjusted 4.5% year-on-year increase in September (previously reported: +4.1% year-on-year) to a 6.2% expansion in October.